What You Need to Know
- For retirees who turned 72 during the last half of 2021, in most cases, April 1 is the last day to begin receiving RMDs.
- April 1 RMD deadline only applies to the required distribution for the first year.
The Internal Revenue Service is reminding retired Americans who turned 72 during the last half of 2021 that, in most cases, April 1 is the last day to begin receiving requirement minimum distribution payments from IRAs, 401(k)s and similar workplace retirement plans.
RMDs are normally made by the end of the year, the IRS explains.
However, “anyone who reached age 72 after June 30, 2021, is covered by a special rule that allows IRA account owners and participants in workplace retirement plans to wait until as late as April 1, 2022, to take their first RMD,” the IRS said.
In other words, the IRS said, the special April 1 rule applies to IRA owners and other participants in these plans who were born after June 30, 1949.
Two payments in the same year
The April 1 RMD deadline only applies to the required distribution for the first year. For all later years, the RMD must be made by Dec. 31, the IRS said.
“This means that taxpayers who turned 72 after June 30, 2021, and receive their first required distribution (for 2021) in 2022 on or before April 1, must receive their second RMD (for 2022) by Dec. 31, 2022,” according to the IRS. “Even though the first distribution is actually the required 2021 distribution, it’s taxable in 2022 and reported on the 2022 tax return – along with the regular 2022 distribution.”
Retirement plans requiring RMDs
These required distribution rules apply to owners of traditional, SEP and SIMPLE IRAs while the original owner is alive, the IRS said.
They also apply to participants in 401(k), 403(b) and 457(b) plans. RMDs don’t apply to Roth IRAs.
“An IRA trustee must either report the amount of the RMD to the IRA owner or offer to calculate it,” the IRS said. “Often, the trustee shows the RMD amount on Form 5498 in Box 12b. For a 2021 RMD, required by April 1, 2022, the RMD amount is shown on the 2020 Form 5498, normally issued to the owner during the first part of 2021.”
Some can delay RMDs
While the April 1 deadline is mandatory for all owners of traditional IRAs and most participants in workplace retirement plans, the IRS explains, some people with workplace plans can wait longer to receive their RMD.